Denton Company manufactures and sells a single product. Cost data for the product are given: Variable...
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Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month $ 3 12 2 1 $ 18 $ 54,000 163,000 $ 217,000 The product sells for $55 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced 18,000 18,000 Units sold 14,000 22,000 The company's Accounting Department has prepared the following absorption costing Income statements for July and August: August Sales Cost of goods sold Gross margin selling and administrative expenses Net operating income Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. July $ 770,000 $ 1,210,000 280,000 440,000 490,000 177,000 770,000 185,000 $ 313,000 $ 585,000 2. Prepare variable costing Income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating Incomes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the unit product cost under: (a) Absorption costing, (b) Variable costing. a. Absorption costing b. Variable costing Unit Product Cost Required 1 Required 2 > Required 1 Required 2 Required 3 Prepare variable costing income statements for July and August. Denton Company Variable Costing Income Statement Sales Variable expenses: Variable cost of goods sold Variable selling and administrative expenses Total variable expenses Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expenses Total fixed expenses Net operating income (loss) July August 0 0 0 0 0 0 S 0 $ 0 Required 1 Required 2 Required 3 Reconcile the variable costing and absorption costing net operating incomes. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes July August Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead cost deferred in (released from) inventory under absorption costing Absorption costing net operating income (loss) Required 2 Required 3 Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month $ 3 12 2 1 $ 18 $ 54,000 163,000 $ 217,000 The product sells for $55 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced 18,000 18,000 Units sold 14,000 22,000 The company's Accounting Department has prepared the following absorption costing Income statements for July and August: August Sales Cost of goods sold Gross margin selling and administrative expenses Net operating income Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. July $ 770,000 $ 1,210,000 280,000 440,000 490,000 177,000 770,000 185,000 $ 313,000 $ 585,000 2. Prepare variable costing Income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating Incomes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the unit product cost under: (a) Absorption costing, (b) Variable costing. a. Absorption costing b. Variable costing Unit Product Cost Required 1 Required 2 > Required 1 Required 2 Required 3 Prepare variable costing income statements for July and August. Denton Company Variable Costing Income Statement Sales Variable expenses: Variable cost of goods sold Variable selling and administrative expenses Total variable expenses Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expenses Total fixed expenses Net operating income (loss) July August 0 0 0 0 0 0 S 0 $ 0 Required 1 Required 2 Required 3 Reconcile the variable costing and absorption costing net operating incomes. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes July August Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead cost deferred in (released from) inventory under absorption costing Absorption costing net operating income (loss) Required 2 Required 3
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Related Book For
Managerial Accounting
ISBN: 978-0077522940
15th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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